Gas prices rise to highest level in 4 years, just in time for summer travel in Maine

Nikki Neal of Old Orchard Beach gases up Wednesday at a 7-Eleven store in town. Neal, who put in just $5 worth, said “I have to take it day by day. I definitely put more thought into it before I take trips.” Staff photo by Shawn Patrick Ouellette

Gas prices headed to their highest point in four years aren’t likely to prompt drivers to hit the brakes on summer road trips and travel in Maine, analysts say.

The average price for regular gas in Maine was $2.81 a gallon Wednesday, about 16 cents more than a month ago and 52 cents higher than the same time last year, according to price tracking website gasbuddy.com. The price of a gallon of gas in Maine has jumped 29 cents since January.

Drivers can expect prices to go up as far as $2.90 before leveling off for the summer, said Patrick DeHaan, head of petroleum analysis at gasbuddy.

“We may see prices climb a little bit more, but I still believe we are kind of in the home stretch of the spring increase we see every year,” DeHaan said.

“It will be higher than the last three years, but still closer to last year than 2014,” summer when gas hovered between $3.65-$3.75 a gallon, he said.

RECORD NUMBERS ON TURNPIKE

Regular gas at the 7-Eleven in Old Orchard Beach was selling for $2.79 a gallon on Wednesday. Staff photo by Shawn Patrick Ouellette

The annual switch to more expensive summer blend gasoline is partially driving high pump prices, but so is the price for crude oil, which rose to nearly $68 a barrel Wednesday, the highest price in four years.

Global markets have tightened up oversupply that pulled down prices in recent years, said Denton Cinquegrana, chief oil analyst at Oil Price Information Service.

There are indications consumers are pulling back spending in reaction to higher as prices, but probably not enough to make a serious change for the travel season, Cinquegrana said.

“It seems like they may be changing patterns a little bit, but as far as canceling a trip to Maine or somewhere in New England, I don’t necessarily think that happens with prices where they are going,” he said. “Now that the upward momentum slows down, people will get a little more used to paying it.”

Creeping gas prices haven’t stopped drivers from using the Maine Turnpike, which recorded 195,303 average daily vehicle trips in 2017, almost 17 percent more than in 2010.

While the pace of traffic volume growth has slowed, it is still higher than ever this year, Turnpike Executive Director Peter Mills said.

“I think people are pent up to travel, they have money in their pockets, the economy is good, a few pennies on the gas isn’t bothering them I guess.”

“The persistence of the recovery has been the thing that has driven traffic, regardless of whether gas is 20 cents higher than it was,” Mills said. “If we saw gas prices persistently higher than $3 a gallon, we would see some impact on travel.”

$3 A GALLON THRESHOLD

That lines up with AAA research, which shows about 40 percent of drivers change spending habits after gas prices pass $3. About 25 percent of drivers start to combine errands, reduce dinners out, and shop and drive less after prices go over $2.75, said Pat Moody, director of public affairs for Northern New England.

Still, it is unlikely people will change their summer travel plans because of the gas price, Moody said.

“It is not going to deter motorists from going out, but it might change how they are going to spend their money when they are on a road trip,” he said. “Gas is a small factor in overall trip planning.”

Most trucking firms have a per-mile gas price surcharges written into their hauling contracts so they are shielded from price volatility, said Joanna Bradeen, CFO at Hartt Transportation in Bangor. The company runs 500 trucks carrying dry goods and has 608 employees.

“While it does impact us, we have a built-in barometer that offsets the gas price,” Bradeen said. When companies pay more to ship goods, they pass those costs onto consumers, she added.

Some people already are feeling the pinch, including Nikki Neal, who was putting $5 of gas in her car at the 7 Eleven in Old Orchard Beach on Wednesday.

“It’s been hard,” Neal said of the increasing prices. “I have to take it day by day. I definitely put more thought into it before I take trips.”

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